Key Takeaways
- Bloom Energy rose 9% on a plan with California Resources for 1 GW or more of fuel cell power and a Barclays upgrade.
- The deal gives Bloom a low-carbon pitch for California data centers, but it’s non-binding.
- Barclays cut its target to $289 from $316 as it upgraded, pointing to rising customer deposits.
- The plan is small next to GE Vernova’s 122 GW of gas equipment under contract.
Bloom Energy (BE) is up 9% today. California Resources (CRC) said after Monday’s close that it will look at building 1 gigawatt or more of Bloom fuel cell power with carbon capture in California. Then Barclays upgraded the stock this morning.
Those projects would supply power that GE Vernova (GEV) could otherwise have bid for with its gas turbines.
A big maybe in California
The memorandum of understanding is non-binding. The projects still need definitive contracts, a final investment decision and EPA permits.
Analysts already expect Bloom’s revenue to more than double this year, to $4.53 billion, and to reach $10.4 billion by 2028.
None of that includes this deal, and it shouldn’t until the deal turns into orders.
California Resources gets a way to sell its gas and storage as power. Its electricity revenue, net of generation costs, was $35 million in the third quarter, up from negative $4 million in the second. Will management put a capex figure or a timeline on the Bloom projects on its 1 p.m. ET call today?
GE Vernova’s gas equipment backlog and slot reservations reached 122 GW in the third quarter, so one gigawatt barely registers. But if California buyers start asking for carbon capture, Bloom has an edge: the companies say its concentrated CO2 exhaust makes capture cheaper.
TIKR tracks 29 analysts on Bloom Energy. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Bloom Energy, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Bloom Energy’s Analyst Ratings
Barclays is watching the deposits
Barclays upgraded Bloom to Overweight from Equal Weight, citing its fast-growing manufacturing capacity and rising customer deposits. It also cut its target to $289 from $316.
Bloom’s negative $180.6 million of third-quarter free cash flow helped sink the stock after earnings. But customer deposits jumped to $661.4 million at Sept. 30, up from $78.2 million at the start of the year.
Barclays’ new target is close to the Street’s $285 consensus.
At Monday’s close, Bloom traded at 40x forward earnings. That’s well below its 76x average at quarter-ends since September 2023.
Fair enough
Today’s move looks fair to me. Barclays is betting on cash that customers have already paid, while the MOU doesn’t move the estimates yet. Bloom’s fourth-quarter report, due early next year, will show us whether its backlog is still growing faster than revenue.
So what is Bloom Energy stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Bloom Energy could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
